US firms feel increasingly unwelcome in China
March 23, 2010, Tuesday
BEIJING: A growing number of American businesses feel unwelcome in China because of what they see as discriminatory government policies and inconsistent legal treatment, a survey released yesterday said.The American Chamber of Commerce in China asked 203 member companies if they felt unwelcome to participate and compete in China’s market, with 38 per cent saying they did, up from 26 per cent in the fourth quarter of 2009.
Inconsistent regulatory interpretation and judicial treatment topped the list of concerns for American businesses, the survey said, without giving any specifics on the legal concerns.
Respondents also cited what they view as a push by Beijing to squeeze foreign technology companies out of the multi-billion dollar market for selling computers and office equipment to government departments.
New rules stipulate sellers of high-tech goods must contain Chinese intellectual property as part of an “indigenous innovation” campaign, in order for them to be included in a government procurement catalogue.
Accredited products will be favoured, according to the policy, which foreign firms say effectively excludes them from the process.
“The AmCham-China survey shows that US companies believe they face product discrimination in state-owned enterprise purchases, as well as in government procurement,” a statement accompanying the survey results said.
The survey was released as the trial opened in Shanghai of four employees of Anglo-Australian miner Rio Tinto — including an Australian citizen — on bribery and trade secrets charges.
The four defendants were arrested last July during contentious iron ore contract negotiations that later collapsed, and after Rio snubbed a near US$20-billion cash injection from state-run Chinese mining firm Chinalco.
The trial has cast a pall over Beijing’s relations with Canberra and raised concerns about doing business in China.
Of the American technology companies surveyed, 57 per cent said they expected the preferential purchasing policy to have a negative impact on their operations in China while 37 per cent said they were already losing sales.
Member-companies believed some policies in China were “increasingly restrictive and protectionist” which could limit foreign participation in the world’s third largest economy, the survey said.
It did not say what percentage of companies felt that way.
The survey also comes as US Internet giant Google has threatened to leave China, citing cyber attacks and censorship, and with Sino-US ties inflamed over a range of contentious issues including China’s currency policy. — AFP
